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What is Voluntary disclosure

Voluntary disclosure is to disclose of so many information which is not required as per law or accounting standards. If board directors, company management are ready to voluntary disclosure of some information, accountant can help them and public can get awareness. If any company want to disclose more information of financial statements, it can use its footnote.

to make the financial statements of a company is necessary and it is also necessary to disclose it through public it via media newspaper. But it is not necessary for company is to inform about the planning or performance of new product or products. But company management can disclose it also in its annual report, so this information is voluntary disclosure.

Company management can disclose any information voluntary for gaining the trust of its investors, customers, employees and public.

Why do you trust on me? Only because I shared all the information with you. I have kept voluntary disclosure policy on this website. In the business of any company, there are lots of accounting information which are top confidential, if company will disclose it, investor will invest in that company with more amount.

Example 4

Future estimations relating to sales. Financial statements only explain past data. Investors want to know future estimations of its sales. Investor can also estimate the sales of company in future but if a company will disclose it voluntary, it will be helpful for investor for taking better investment decision. Because company has lots of tool for finding more correct amount in estimation.

Example 5

Voluntary disclosure can be understand from Govt. of India's VRS. It means, all those who will tell their black money, Govt. of India give reward under voluntary disclosure scheme. Like this, in every business or accounting department, there are lots of top secret information which a company can share with public with disclosing its normal financial statements.

Conclusion

We should also take care, if we open the our home's door without lock, someone can steal our money also. Company's competitor can take its benefit. So, company has to become careful which information has to disclose voluntarily and which not.

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